Morgan Stanley says Edison may be able to recover costs for Thomas Fire. After the California Dept. of Forestry and Fire Protection and the Ventura County Fire Department determined that and Edison International power line was the cause of the 2017 Thomas Fire, Morgan Stanley analyst Stephen Byrd noted that subsidiary Southern California Edison disputed the Cal Fire report. Byrd said he does not see any evidence in the report indicative of negligence or other violations and he believes it is possible Edison may be able to recover these costs. He keeps an Equal Weight rating and $81 price target on Edison International shares.

Southern California Edison issued last night the following response to the report by CAL FIRE and VCFD on their review of the causes of the Anlauf Canyon ignition of the Thomas Fire: "We keep in our thoughts all those who have been affected by wildfires. The devastating loss of lives, homes and businesses is tragic, and SCE will continue to provide assistance and support to those affected by wildfires. The safety of our customers, our employees and our communities remains our most important focus. SCE believes evidence shows there were at least two separate ignitions on Dec. 4, 2017, that led to two fires that together are commonly referred to as the Thomas Fire - one in the Anlauf Canyon area of Ventura County and another near Koenigstein Road in the city of Santa Paula. Based on currently available information, SCE has not determined whether its equipment caused the ignition in the Anlauf Canyon area. SCE has evidence that the ignition at Anlauf Canyon started at least 12 minutes prior to any issue involving SCE's system and at least 15 minutes prior to the start time indicated by VCFD in its report. SCE provided this evidence to CAL FIRE and VCFD investigators; however, the report does not suggest this evidence was considered. SCE believes the Anlauf Canyon ignition may have been independently responsible for a significant portion of the Thomas Fire damages. SCE also is not aware of any basis for criminal liability. Separately, the company previously disclosed that its equipment appears to have been associated with the Koenigstein ignition. The specific cause cannot be determined until SCE can analyze the equipment currently in CAL FIRE's possession and any other evidence that may be described in a separate report, relating to the Koenigstein ignition, which has not yet been issued. SCE fully cooperated with fire officials throughout their investigation."

Edison International price target raised to $65.50 from $57 at Mizuho. Mizuho analyst Paul Fremont raised his price target for Edison International to $65.50 from $57 citing higher group average multiples and keeps a Buy rating on the shares. The Ventura County Fire Department yesterday released its report on the December 4, 2017 Thomas Fire. After ruling out several other potential causes, the fire investigation team concluded that the Thomas Fire occurred when SCE power lines came into contact with each other between two power poles and ignited dry ground vegetation, Fremont tells investors in a research note. The report ruled out other potential causes including, campfire, civilian debris, arson, and third-party equipment, the analyst adds.

The Ventura County Fire Department announced that it has determined the Thomas Fire, which occurred in December 2017, was started by power lines coming into contact during high winds. The Thomas Fire started on the evening of December 4, 2017 and burned a total of 281,893 acres; destroying 1,063 structures and resulting in one civilian and one firefighter fatality. A high wind event caused the power lines to come into contact with each other, creating an electrical arc. The electrical arc deposited hot, burning or molten material onto the ground, in a receptive fuel bed, causing the fire. The common term for this situation is called "line slap," and the power line in question is owned by Southern California Edison, the VCFD stated. Reference Link

Catch up on today's top five analyst upgrades with this list compiled by The Fly: 1. Hertz (HTZ) upgraded to Equal Weight from Underweight at Barclays with analyst Brian Johnson saying strength in used car and rental car prices creates a favorable backdrop for Hertz to refinance its corporate debt. 2. L Brands (LB) upgraded to Overweight from Equal Weight at Barclays with analyst Chethan Mallela saying the company's fiscal 2019 guidance should establish an earnings "floor," which creates an "increasingly positive" risk/reward for the shares. 3. Kraft Heinz (KHC) upgraded to Hold from Sell at Societe Generale. 4. Edison International (EIX) upgraded to Neutral from Underperform at BofA/Merrill with analyst Julien Dumoulin-Smith saying he sees progress by the California legislature to address utilities' current status of "insurer of last resort," potentially allowing a recovery in Edison shares. 5. Expedia (EXPE) upgraded to Buy from Hold at Argus with analyst John Staszak citing the company's "strong" Q4 results, anticipated 10%-15% adjusted EBITDA growth in 2019, the management's optimism about continued international expansion, and its attractive valuation at 17.9-times his expected forward earnings. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.